The
Centers for Medicare and Medicaid Services (CMS) recently released guidance to help
states align Alternative Benefit Plans (ABPs) under Medicaid programs with the
Essential Health Benefit (EHB) requirements. Prior federal Medicaid law (Deficit Reduction Act of 2005, §1937 of the Social Security
Act)
has allowed states to design Medicaid
benefit packages under their state plans. The Affordable Care Act (ACA)
made changes to §1937 that become effective on January 1, 2014, which are:

any
ABP that will cover the optional Medicaid expansion population under the ACA
must cover EHB as described in ACA

CMS
intends for the provisions of the recent EHB proposed rule, released on November 20, generally to apply to
Medicaid. However, modifications will be provided in future rulemaking
that will apply when furnishing EHB services to Medicaid beneficiaries. CMS' State Medicaid Director letter says, "[s]ection 1937
coverage options are a starting point for states to establish their [ABPs], and
the process for ensuring coverage of and, as necessary, adding EHBs will mirror
steps taken by issuers in the individual and small group markets … "

For
states to develop a benefit plan that meets the ACA provisions, CMS proposes
that (1) states initially choose a coverage option from the choices in §1937
and (2) then determine whether the §1937 option is one of the options that is
available for defining EHBs in the individual and small group market (there is
overlap between these options).

In
future regulations, CMS intends to propose the following provisions, among
others:

The
supplementation process for ensuring coverage of the 10 EHB categories is to be
the same as proposed in ACA.

The
following EHB definition/options are to be adapted to Medicaid: (1) Habilitative
Services: States will define the benefit and will request comment on the
parameters for this benefit. (2) Pediatrics: For children enrolled in
Medicaid, all medically necessary services generally are covered under the Early Periodic Screening,
Diagnosis, and Treatment (EPSDT)
benefit. Therefore, EHB supplementation is not necessary. (Note that EPSDT covers children to age 21;
whereas, pediatric services under the EHB proposed rule would cover children
for services under age 19.)

Free
choice of qualified providers continues.

States that wish to establish a new §1937 ABP or to modify an existing ABP substantially are required to
publish public notice for public comment from stakeholders prior to submitting
their State Plan Amendment to CMS.